Apple Watch dispute may be split into patents and secrets

Bifurcating trade secrets and patent claims for a jury is an unusual process. However, U.S. District Judge James V. Selna in Santa Ana may be in a unique position where it could be easier for him to split Masimo Corp.'s trade secrets lawsuit against Apple Inc. regarding alleged wristwatch pulse oximetry infringement due to its complex procedural history, intellectual property attorneys unrelated to the case said Thursday.

"Bifurcation is unusual in patent cases, but Masimo v. Apple is a pretty unusual case," Armond Wilson LLP partner Michelle E. Armond, an intellectual property attorney not attached to the matter, said in a phone interview. "Usually, bifurcation only happens if there's some sort of efficiency consideration or if they feel like the first phase of the trial will resolve the dispute."

Jeannine Y. Sano, an experienced intellectual property attorney with Axinn LLP in San Francisco, commented in an email, "Motions to bifurcate trial used to be more common (generally in the context of bifurcating damages from liability), but less so in the last 10-15 years." She is not connected to the Masimo v. Apple case.

As uncommon as the motion appears to be, the two attorneys said Selna's decision could go either way and any approval order would be aimed at reducing jury confusion in this instance.

In 2020, Masimo sued Apple on claims it stole propriety technology related to blood oxygen sensors and unlawfully incorporated it into its Apple Watches. Months after the lawsuit was filed, Selna issued a stay on Masimo's patent infringement claims pursuant to a pending petition from Apple that sat before the U.S. Patent and Trademark Office Patent Trial and Appeal Board for two years. After the board confirmed the patentability of the claims in May 2022, Apple appealed, which kept the stay in place for an additional two years.

While the appeal was in place, the parties went to trial in 2023 over the trade secret and patent ownership claims of the case. Selna declared a mistrial after the jury failed to reach a unanimous verdict. After the patent stay was lifted in April, Selna scheduled all the claims to go to trial beginning Nov. 5. Masimo Corp. et al. v. Apple Inc., 8:20-cv-00048 (C.D. Cal., filed Jan. 9, 2020).

However, on July 17, Apple's counsel at Wilmer Cutler Pickering Hale & Dorr LLP moved to bifurcate the patent infringement claims in the upcoming trial. In a reply brief to Masimo's opposition to the motion Wednesday, Apple argued - among other things such as aging witnesses - Masimo's counsel at Knobbe Martens Olson & Bear LLP "untimely" served a new set of 864-page-long infringement contentions on July 5 that a not-yet-assigned special master will need extensive time to review.

"It is because of plaintiffs' behavior that it is necessary to bifurcate the patent-infringement claims - which, until a few months ago, were already on a separate track - to allow them to be tried when ripe for trial, while allowing the currently-scheduled November trial to proceed with the retrial claims," Apple's counsel wrote in the brief. "Apple's interest in a speedy retrial has been motivated by a desire to avoid the passage of more time from the events that are the focus of plaintiffs' claims. ... It is long past time to bring these claims to closure."

Regarding Apple's motion, Armond commented: "You can absolutely see that it might be hard for a jury to kind of absorb all of that. I think Judge Selna can go either way on that. Certainly, it would be easier for him and the jury to just do the case that's already been tried."

Sano, who referred to Selna as "a no-nonsense judge," said, "Even though it would make sense to bifurcate trade secrets and patent claims since they are distinct claims and would reduce jury confusion (so at least two of the five factors considered for bifurcation), I can see why it would benefit Masimo to try both sets of claims together."

Lead attorneys for Masimo did not respond to inquiries regarding Apple's recent arguments by press deadline Thursday. In their opposition filing on July 26, the plaintiffs' counsel argued bifurcation was not necessary because the entirety of their case involves overlapping technology and the patent claims would not face an elimination, for example, if Apple prevailed during any first trial.

Armond seemingly disagreed with Masimo's characterization of overlap in its case.

"Here, I think there is less overlap, and they also do have kind of a case that's already ready for trial on the trade secret claims, but then you have patent case claims that need to get added in and that brings its own set of complexities and claim construction," Armond said.

Additionally, Masimo argued Apple's contention that it wanted to quickly bring closure to the case "rings hollow because Apple had no problem delaying Masimo's patent claims for almost four years," the plaintiffs' counsel wrote in the opposition.

Selna is scheduled to hear oral arguments on the matter on Aug. 19.